Life insurance provides financial protection for your family members if, God forbid, you die in the future for any reason. However, many people underestimate its importance because they think life insurance is expensive.
For example, for a healthy 35 year old, people would assume that it would cost around $ 500 in premiums per year to get $ 250,000 in coverage. However, the actual premium costs can range from $ 140 to $ 160 per year.
Likewise, there are many benefits of life insurance that you should know about if you don’t already know them. We have mentioned the most important ones in this article.
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Fiscal advantages
Your beneficiaries will receive a death benefit if you unfortunately die under a life insurance policy. In addition, your beneficiaries are not required to report life insurance payments when filing their income tax return.
Financial protection
Experts recommend life insurance equal to 7 to 10 times your annual income. A policy or policies of this size will ensure that your dependents don’t have to worry about large expenses and other lifestyle costs. For example, your insurance policy can cover your children’s college education and they won’t have to take out student loans.
Funeral cover
In 2019, the national median price for funerals, including visitation and burial, was $ 7,640. Many Americans do not have the savings to pay for an emergency expense of $ 400. This can make paying for the funeral a significant financial burden.
Your beneficiaries can access money from your life insurance policy for paying your funeral expenses. Some insurers also offer final expense policies. These policies offer low coverage and affordable monthly premiums.
Help with your retirement plans
If you are considering purchasing a variable, universal, or whole life insurance policy, the policy may accumulate cash value and provide death benefits. You can use the cash value to pay for expenses such as buying a vehicle or making a down payment on the house.
Note that a life insurance policy does not replace traditional retirement accounts such as a 401k or an IRA. In addition, cash value life insurance is significantly more expensive than term insurance, which does not have a savings component but only offers a death benefit.
Protection against disease
Many life insurance companies have endorsements (also called endorsements) that you can add to your policy to enhance your offerings.
For example, an accelerated benefit rider allows you to access your death benefits in certain situations. Plus, you can access your death benefit while you’re alive if you have a terminal diagnosis and plan to live for less than 12 months.
Bonus tip: teach your family about claims resolution
Life is uncertain at best. One day you’re here, and another day – well!
God forbid, you die with an active life insurance policy, make sure your family will receive the amount of coverage. Sure, this will help them meet their lifestyle needs, but hey, is the claims settlement process that simple?
Yes and no.
If the candidate knows the correct steps and the documentation required to make a claim, they will get the amount in no time. But if they don’t know the process, it will take them months to get the money, and we can only imagine the turmoil your family will have to go through.
Not something you would want.
It is therefore crucial that you let them know about your policy and how to settle the claim so that they do not have to make multiple trips to the insurance company’s office when they are already mourning your loss.
Last word
Life insurance isn’t just for the wealthy. It is affordable and meant for everyone, regardless of income. It can help your loved ones make ends meet in the event of death. Needless to say you must have it – no excuses!
Make sure you understand the benefits of life insurance listed in this article and get one from the Frédéric insurance agency today!
Interesting related article: “What does life insurance mean?” “